**EXHIBIT
      10.13**


**AMENDED**


**ENGAGEMENT
      AGREEMENT**





AGREEMENT
      made as of the 1st day of September, 2006 between Capital Gold Corporation,
      a
      Delaware Corporation having an office at 76 Beaver Street, 26 th Floor,
      New York, NY 10005 (hereinafter referred to as the “CORPORATION”), and
      Christopher M. Chipman, an individual residing at 4014 Redwing Lane, Audubon,
      PA
      19407 (hereinafter referred to as “CHIPMAN”).





This
      agreement (the “Agreement”) amends, supersedes and replaces the engagement
      agreement by and between the CORPORATION and CHIPMAN dated March 1,
      2006.





IN
      CONSIDERATION OF the
      premises and mutual covenants and conditions herein contained, the CORPORATION
      and CHIPMAN hereby agree as follows:





1. Engagement .
      The
      CORPORATION agrees to engage CHIPMAN, and CHIPMAN agrees to serve the
      CORPORATION as a Chief Financial Officer for the CORPORATION upon the terms
      and
      conditions hereafter set forth. The duties of CHIPMAN shall be consistent with
      his position as an executive, and shall be those duties customarily performed
      by
      an executive of his experience.





2. Term .
      This
      Agreement becomes effective on September 1, 2006, and shall expire on August
      31,
      2007, with an option for an additional 12 months, if mutually agreed upon by
      both parties, subject to provisions of Article 6 herein provided.





3. Compensation
      And Other Benefits.





(a) For
      his
      services to the CORPORATION during the TERM, the CORPORATION shall pay CHIPMAN
      a
      fee (“Fee”) at the annual base rate of One Hundred Twenty Thousand ($120,000)
      Dollars payable at $10,000 per month.





(b) As
      an
      independent contractor, CHIPMAN will not participate in the CORPORATION’S Group
      Medical program or 401K pension program.





4. Services .
      CHIPMAN
      agrees to serve the CORPORATION faithfully and to the best of his ability,
      and
      shall devote fifty percent (50%) of his business time, attention and energies
      to
      the business of the CORPORATION during the regular business hours and at any
      other time during the week as reasonably requested by the CORPORATION and/or
      required by the demands of his position. All services required to be rendered
      by
      CHIPMAN may be rendered for the benefit of any of the CORPORATION’S affiliates
      or subsidiaries, but no liability shall attach to such affiliate or subsidiary
      for the payment of any compensation hereunder.





5. Expenses .
      During
      the period of his engagement, CHIPMAN will be reimbursed for his reasonable
      and
      necessary expenses incurred by him pursuant to his engagement hereunder, such
      expenses to include necessary travel and related costs incurred on behalf of
      the
      CORPORATION





and
      in
      commuting to and from the CORPORATION’s offices in New York as well as lodging
      expenses while in New York, NY, if necessary, upon submission of appropriate
      receipts or vouchers therefore.





6. Termination.




(a) The
      CORPORATION may discharge CHIPMAN for cause at any time
      as
      provided herein. For purposes hereof, “cause” shall mean the willful engaging by
      CHIPMAN in illegal conduct or gross misconduct which is demonstrably and
      materially injurious
      to the CORPORATION. For purposes of this Agreement, no act, or failure to act,
      on CHIPMAN’s part shall be deemed "willful" unless done, or omitted to be done,
      by CHIPMAN not in good faith and without reasonable belief that CHIPMAN's action
      or omission was in the best interest of the CORPORATION. Notwithstanding the
      foregoing, CHIPMAN shall not be deemed to have been terminated for Cause unless
      and until the CORPORATION delivers to CHIPMAN a copy of a resolution duly
      adopted by the affirmative vote of not less than three-quarters of the entire
      membership of the Board at a meeting of the Board called and held for such
      purpose (after reasonable notice to CHIPMAN and an opportunity for CHIPMAN,
      together with counsel, to be heard before the Board) finding that, in the good
      faith opinion of the Board, CHIPMAN was guilty of conduct set forth above and
      specifying the particulars thereof in detail.





(b) This
          Agreement shall terminate upon the death or disability of CHIPMAN.
          For purposes of this subsection (b), “disability” shall mean the inability of CHIPMAN
          effectively to substantially provide the services hereunder by reason of
          any medically
          determinable physical or mental impairment which can be expected to result
          in death
          or
          which has lasted or can be expected to last for a continuous period of
          not less
          than twelve
          (12) months.





(c) CHIPMAN
          shall have the right to terminate this Agreement upon not less
          than
          sixty (60) days prior written notice of termination.





(d) The
      Agreement can be terminated Upon a Change of Control as defined in the Agreement
      Regarding Change In Control (“Change In Control Agreement”) attached hereto as
      Exhibit A.





7. Effect
      of Termination .





(a) In
      the
      event that this Agreement is terminated for "cause" pursuant to
      subsection 6(a), the CORPORATION shall pay CHIPMAN, at the time of such
      termination, only the fees due and payable to him through the date of the
      termination of this Agreement.





(b) In
      the
      event this Agreement is terminated at his election pursuant to subsection 6(c)
      or due to CHIPMAN’s death or disability pursuant to 6(b), the CORPORATION shall
      pay to CHIPMAN, at the time of such termination, the fees otherwise due and
      payable to him through the last day of the month in which such termination
      occurs.


2


(c) In
      the
      event of a Termination Upon a Change of Control as defined in the Change In
      Control Agreement, the CORPORATION’s obligation to CHIPMAN shall be as set forth
      in the Change In Control Agreement.




8. Trade
      Secrets And Non-Disclosure .
      CHIPMAN
      hereby acknowledges that certain trade secrets of the CORPORATION are valuable,
      special and unique assets of the CORPORATION’S business. Such trade secrets
      include but are not limited to its customer lists and the sources of its
      materials and products. CHIPMAN hereby covenants that he will not, during or
      after the term of his employment, disclose any of the foregoing secrets or
      any
      part thereof to any firm, person or corporation or any entity for any reason
      or
      purpose whatsoever. In the event of a breach or threatened breach by CHIPMAN
      of
      the provisions of this Paragraph, the CORPORATION shall be entitled to proceed
      in any court for an injunction restraining CHIPMAN from disclosing, in whole
      or
      in part, any of the aforesaid trade secrets, or from rendering such service
      to
      any person, firm, corporation, association or any entity to whom such trade
      secrets, in whole or in part, have been disclosed, or are threatened to be
      disclosed. Nothing herein contained shall be construed as prohibiting the
      CORPORATION from pursuing any other remedies for such breach or threatened
      breach, including the recovery of damages from CHIPMAN and/or from proceeding
      pursuant to the arbitration provisions of this Agreement.




9. Non-Compete .
      Without
      the prior written approval of the CORPORATION’S Chief Executive Officer or
      President, Chipman shall not, directly or indirectly, during the term of this
      agreement and until the end of twelve (12) months after termination:




(a) Engage
      in
      a “Competing Business’’ in the “Territory”, as those terms are defined below.
“Competing Business” shall mean any business that mines or produces minerals
      which is competitive with the CORPORATION’S or any of its Affiliates, as
      conducted or under development at any time during the term of this agreement
      “Territory” shall mean anywhere in Mexico.




(b) Make
      any
      public statement or perform or do any other act prejudicial or injurious to
      the
      reputation or goodwill of the CORPORATION or any of its Affiliates or otherwise
      interfere with the CORPORATION’S business or that of any of its
      Affiliates.




10. Notices .
      Any
      notice or other communication pursuant to this Agreement shall be in writing
      and
      shall be sent by telecopy or by certified or registered mail addressed to the
      respective parties as follows:





(i) If
          to the
          CORPORATION, to:




Capital
      Gold Corporation


76
      Beaver
      Street, 26 th Floor


New
      York,
      NY 10005


Tel.
      No.:
      (212) 344-5158


Fax
      No..:
      (212) 344-4537


Attention:
      VP of Corporate Development


3


(ii) If
      to
      CHIPMAN, to:




Christopher
      M. Chipman


4014
      Redwing Lane


Audubon,
      PA 19407


Tel.
      No.:
      (610) 631-2263


Fax
      No.:





or
      to
      such other address as the parties shall have designated by notice to the other
      parties given in accordance with this section. Any notice or other communication
      shall be deemed to have been duly given if personally delivered or mailed via
      registered or certified mail, postage prepaid, return receipt requested, or,
      if
      sent by telecopy, when confirmed.





11. Modification .
      No
      modification or waiver of this Agreement or any provision hereof shall be
      binding upon the party against whom enforcement of such modification or waiver
      is sought unless it is made in writing and signed by or on behalf of both
      parties hereto.





12. Miscellaneous .
      (a)
      This Agreement shall be subject to and construed in accordance with the laws
      of
      the State of New York.




(b) The
      waiver by either party of a breach of any provision of this Agreement
      by the other party shall not operate and be construed as a waiver or a
      continuing waiver by that party of the same or any subsequent breach of any
      provision of this Agreement by the other party.





(c) If
      any
      provisions of this Agreement or the application thereof to any person
      or
      circumstance shall be determined by any court of competent jurisdiction to
      be
      invalid or unenforceable to any extent, the remainder hereof, or the application
      of such provision to persons or circumstances other than those as to which
      it is
      so determined to be invalid or unenforceable, shall not be affected thereby,
      and
      each provision hereof shall be valid and shall be enforced to the fullest extent
      permitted by law.





(d) This
          Agreement shall be binding on and inure to the benefit of the parties
          hereto and their respective heirs, executors and administrators, successors
          and assigns.





(e) This
          Agreement shall not be assignable in whole or in part by either party,
          except that the CORPORATION may assign this Agreement to and it shall be
          binding
          upon any subsidiary or affiliate of the CORPORATION or any person, firm
          or
          corporation with which the CORPORATION may be merged or consolidated or
          which
          may acquire all or substantially all of the assets of the
          CORPORATION.


4




**IN** ****** **WITNESS
      WHEREOF, this Agreement has been signed by the parties hereto as of the date
      first above written.**





**CAPITAL
      GOLD CORPORATION**





**By:** s/Jeffrey
      Prichard


**Jeff
      Pritchard, VP of Corporate Development**







**By:** s/
      Gifford A. Dieterle





**Gifford
      Dieterlie, CEO**







**By:** s/
      Christopher M. Chipman


**Christopher
      M. Chipman, CFO**




5


**EXHIBIT
      A**





**AGREEMENT
      REGARDING**


**CHANGE
      IN CONTROL**





THIS
      AGREEMENT (“Agreement”), is made and entered into as of the 1 st day of
      September, 2006 (the “Effective Date”) by and between Capital Gold Corporation
      (the “Company”) and Christopher M. Chipman (the “Executive”)





WITNESSETH
      THAT:





WHEREAS,
      the Company considers it essential to the best interests of its stockholders
      to
      foster the continuous engagement of key management personnel, and the Board
      of
      Directors of the Company (the “Board”) recognizes that, as is the case with many
      publicly held corporations, a change in control might occur and that such
      possibility, and the uncertainty and questions which it may raise among
      management, may result in the departure or distraction of management personnel
      to the detriment of the Company and its stockholders; and





WHEREAS,
      the Board has determined that appropriate steps should be taken to reinforce
      and
      encourage the continued attention and dedication of members of the Company’s
      management, including the Executive, to their engagement without distraction
      in
      the face of potentially disturbing circumstances arising from the possibility
      of
      a change in control of the Company;





NOW,
      THEREFORE, to induce the Executive to remain engaged by the Company and in
      consideration of the premises and mutual covenants set forth herein, IT IS
      HEREBY AGREED by and between the parties as follows:





1. AGREEMENT
      TERM. The initial “Agreement Term” shall begin on the Effective Date and shall
      continue through August 31, 2007. As of August 31, 2007, and as of each August
      31 thereafter, the Agreement Term shall extend automatically to the next
      anniversary thereof unless the Company gives notice to the Executive prior
      to
      the date of such extension that the Agreement Term will not be extended.
      Notwithstanding the foregoing, if a Change in Control (as defined in Section
      7
      below), occurs during the Agreement Term, the Agreement Term shall continue
      through and terminate on the first anniversary of the date on which the Change
      in Control occurs.





2. ENTITLEMENT
      TO CHANGE IN CONTROL BENEFITS. The Executive shall be entitled to the Change
      in
      Control Benefits described in Section 3 hereof if the Executive’s engagement by
      the Company is terminated during the Agreement Term but after a Change in
      Control (i) by the Company for any reason other than Permanent Disability or
      Cause, (ii) by the Executive for Good Reason or (iii) by the Executive for
      any
      reason during the 30-day period commencing on the first date which is six months
      after the date of the Change in Control. For purposes of this
      Agreement:


A-1




(a) A
      termination of the Executive’s engagement shall be treated as a termination by
      reason of “Permanent Disability” only if, due to a mental or physical
      disability, the Executive is absent from the performance of services for the
      Company for a period of at least twelve consecutive months and fails to return
      to the performance of services within 30 days after receipt of a written demand
      by the Company to do so.





(b) The
      term
“Cause” shall mean the willful engaging by the Executive in illegal conduct or
      gross misconduct which is demonstrably and materially injurious to the Company.
      For purposes of this Agreement, no act, or failure to act, on the Executive’s
      part shall be deemed “willful” unless done, or omitted to be done, by the
      Executive not in good faith and without reasonable belief that the Executive’s
      action or omission was in the best interest of the Company. Notwithstanding
      the
      foregoing, the Executive shall not be deemed to have been terminated for Cause
      unless and until the Company delivers to the Executive a copy of a resolution
      duly adopted by the affirmative vote of not less than three-quarters of the
      entire membership of the Board at a meeting of the Board called and held for
      such purpose (after reasonable notice to the Executive and an opportunity for
      the Executive, together with counsel, to be heard before the Board) finding
      that, in the good faith opinion of the Board, the Executive was guilty of
      conduct set forth above and specifying the particulars thereof in
      detail.





(c) The
      term
“Good Reason” shall mean the occurrence of any of the following circumstances
      without the Executive’s express written consent:





(i) a
      significant
      adverse change in the nature, scope or status of the Executive’s position,
      authorities or services from those in effect immediately prior to the Change
      in
      Control, including, without limitation, if the Executive was, immediately prior
      to the Change in Control, an executive officer of a public company, the
      Executive ceasing to be an executive officer of a public company;





(ii) the
      failure
      by the Company to pay the Executive any portion of the Executive’s current
      compensation, or to pay the Executive any portion of any installment of deferred
      compensation under any deferred compensation program of the Company, within
      seven days of the date such compensation is due;





(iii) a
      reduction
      in the Executive’s annual base compensation (or a material change in the
      frequency of payment) as in effect immediately prior to the Change in Control
      as
      the same may be increased from time to time;





(iv) the
      failure by the Company to award the Executive an annual bonus in any year which
      is at least equal to the annual bonus awarded to the Executive for the year
      immediately preceding the year of the Change in Control;





(v) the
      failure by the Company to award the Executive equity-based incentive
      compensation (such as stock options, shares of restricted stock, or other
      equity-based


A-2


compensation)
      on a periodic basis consistent with the Company’s practices with respect to
      timing, value and terms prior to the Change in Control;





(vi) the
      failure of the Company to award the Executive incentive compensation of any
      nature based on attained milestones when such milestones are attained.





(vii) the
      failure of the Company to obtain a satisfactory agreement from any successor
      to
      the Company to assume and agree to perform this Agreement as contemplated by
      Section 14.





For
      purposes of any determination regarding the existence of Good Reason, any good
      faith determination by the Executive that Good Reason exists shall be
      conclusive.





3. CHANGE
      IN
      CONTROL BENEFITS. In the event of a termination of engagement entitling the
      Executive to benefits in accordance with Section 2, the Executive shall receive
      the following:





(a) The
      Executive shall be entitled to a lump sum payment in cash no later than twenty
      business days after the Executive’s date of termination equal to the sum
      of:





(i) an
      amount
      equal to one times the Executive’s base salary in effect on the date of the
      Change in Control or, or if greater, as in effect immediately prior to the
      date
      of termination; plus





(ii) an
      amount
      equal to one times the Executive’s bonus award for the year immediately
      preceding the year of the Change in Control.





The
      amount payable under this paragraph (d) shall be inclusive of the amounts,
      if
      any, to which the Executive would otherwise be entitled or by law and shall
      be
      in addition to (and not inclusive of) any amount payable under any written
      agreement(s) directly between the Executive and the Company or any of its
      subsidiaries.





(b) The
      exercise price of all of the Company options owned by the Executive shall
      decrease to $0.01 per share.





(c) The
      Company shall provide the Executive with outplacement services and tax and
      financial counseling suitable to the Executive’s position through the first
      anniversary of the date of the Executive’s termination of engagement, or, if
      earlier, the date on which the Executive becomes employed by another
      employer.





4. MITIGATION.
      The Executive shall not be required to mitigate the amount of any payment
      provided for in this Agreement by seeking other engagement or otherwise. The
      Company shall not be entitled to set off against the amounts payable to the
      Executive under this Agreement any amounts owed to the Company by the Executive,
      any amounts earned by the Executive in other engagement after the Executive’s
      termination of engagement with the


A-3


Company,
      or any amounts which might have been earned by the Executive in other engagement
      had the Executive sought such other engagement.





5. MAKE-WHOLE
      PAYMENTS. If any payment or benefit to which the Executive (or any person on
      account of the Executive) is entitled, whether under this Agreement or
      otherwise, in connection with a Change in Control or the Executive’s termination
      of engagement (a “Payment”) constitutes a “parachute payment” within the meaning
      of section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
      and as a result thereof the Executive is subject to a tax under section 4999
      of
      the Code, or any successor thereto, (an “Excise Tax”), the Company shall pay to
      the Executive an additional amount (the “Make-Whole Amount”) which is intended
      to make the Executive whole for such Excise Tax. The Make-Whole Amount shall
      be
      equal to (i) the amount of the Excise Tax, plus (ii) the aggregate amount of
      any
      interest, penalties, fines or additions to any tax which are imposed in
      connection with the imposition of such Excise Tax, plus (iii) all income, excise
      and other applicable taxes imposed on the Executive under the laws of any
      Federal, state or local government or taxing authority by reason of the payments
      required under clauses (i) and (ii) and this clause (iii).





(a) For
      purposes of determining the Make-Whole Amount, the Executive shall be deemed
      to
      be taxed at the highest marginal rate under all applicable local, state, federal
      and foreign income tax laws for the year in which the Make-Whole Amount is
      paid.
      The Make-Whole Amount payable with respect to an Excise Tax shall be paid by
      the
      Company coincident with the Payment with respect to which such Excise Tax
      relates.





(b) All
      calculations under this Section 5 shall be made initially by the Company and
      the
      Company shall provide prompt written notice thereof to the Executive to enable
      the Executive to timely file all applicable tax returns. Upon request of the
      Executive, the Company shall provide the Executive with sufficient tax and
      compensation data to enable the Executive or the Executive’s tax advisor to
      independently make the calculations described in subparagraph (a) above and
      the
      Company shall reimburse the Executive for reasonable fees and expenses incurred
      for any such verification.





(c) If
      the
      Executive gives written notice to the Company of any objection to the results
      of
      the Company’s calculations within 60 days of the Executive’s receipt of written
      notice thereof, the dispute shall be referred for determination to independent
      tax counsel selected by the Company and reasonably acceptable to the Executive
      (“Tax Counsel”). The Company shall pay all fees and expenses of such Tax
      Counsel. Pending such determination by Tax Counsel, the Company shall pay the
      Executive the Make-Whole Amount as determined by it in good faith. The Company
      shall pay the Executive any additional amount determined by Tax Counsel to
      be
      due under this Section 5 (together with interest thereon at a rate equal to
      120%
      of the Federal short-term rate determined under section 1274(d) of the Code)
      promptly after such determination.





(d) The
      determination by Tax Counsel shall be conclusive and binding upon all parties
      unless the Internal Revenue Service, a court of competent jurisdiction, or
      such
      other duly empowered governmental body or agency (a “Tax Authority”) determines
      that the Executive


A-4


owes
      a
      greater or lesser amount of Excise Tax with respect to any Payment than the
      amount determined by Tax Counsel.





(e) If
      a
      Taxing Authority makes a claim against the Executive which, if successful,
      would
      require the Company to make a payment under this Section 5, the Executive agrees
      to contest the claim with counsel reasonably satisfactory to the Company, on
      request of the Company subject to the following conditions:





(i) The
      Executive
      shall notify the Company of any such claim within 10 days of becoming aware
      thereof. In the event that the Company desires the claim to be contested, it
      shall promptly (but in no event more than 30 days after the notice from the
      Executive or such shorter time as the Taxing Authority may specify for
      responding to such claim) request the Executive to contest the claim. The
      Executive shall not make any payment of any tax which is the subject of the
      claim before the Executive has given the notice or during the 30-day period
      thereafter unless the Executive receives written instructions from the Company
      to make such payment together with an advance of funds sufficient to make the
      requested payment plus any amounts payable under this Section 5 determined
      as if
      such advance were an Excise Tax, in which case the Executive will act promptly
      in accordance with such instructions.





(ii) If
      the
      Company so requests, the Executive will contest the claim by either paying
      the
      tax claimed and suing for a refund in the appropriate court or contesting the
      claim in the United States Tax Court or other appropriate court, as directed
      by
      the Company; PROVIDED, HOWEVER, that any request by the Company for the
      Executive to pay the tax shall be accompanied by an advance from the Company
      to
      the Executive of funds sufficient to make the requested payment plus any amounts
      payable under this Section 5 determined as if such advance were an Excise Tax.
      If directed by the Company in writing the Executive will take all action
      necessary to compromise or settle the claim, but in no event will the Executive
      compromise or settle the claim or cease to contest the claim without the written
      consent of the Company; PROVIDED, HOWEVER, that the Executive may take any
      such
      action if the Executive waives in writing the Executive’s right to a payment
      under this Section 5 for any amounts payable in connection with such claim.
      The
      Executive agrees to cooperate in good faith with the Company in contesting
      the
      claim and to comply with any reasonable request from the Company concerning
      the
      contest of the claim, including the pursuit of administrative remedies, the
      appropriate forum for any judicial proceedings, and the legal basis for
      contesting the claim. Upon request of the Company, the Executive shall take
      appropriate appeals of any judgment or decision that would require the Company
      make a payment under this Section 5. Provided that Executive is in compliance
      with the provisions this section, the Company shall be liable for and indemnify
      the Executive against any loss in connection with, and all costs and expenses,
      including attorneys’ fees, which may be incurred as a result of, contesting the
      claim, and shall provide to the Executive within 30 days after each written
      request therefor by the Executive cash advances or reimbursement for all such
      costs and expenses actually incurred or reasonably expected to be incurred
      by
      the Executive as a result of contesting the claim.





A-5


(f) Should
      a
      Tax Authority finally determine that an additional Excise Tax is owed, then
      the
      Company shall pay an additional Make-Whole Amount to the Executive in a manner
      consistent with this Section 5 with respect to any additional Excise Tax and
      any
      assessed interest, fines, or penalties. If any Excise Tax as calculated by
      the
      Company or Tax Counsel, as the case may be, is finally determined by a Tax
      Authority to exceed the amount required to be paid under applicable law, then
      the Executive shall repay such excess to the Company within 30 days of such
      determination; provided that such repayment shall be reduced by the amount
      of
      any taxes paid by the Executive on such excess which is not offset by the tax
      benefit attributable to the repayment.





6. TERMINATION
      DURING POTENTIAL CHANGE IN CONTROL. If a Potential Change in Control (as defined
      in Section 8) occurs during the Agreement Term, and the Company terminates
      the
      Executive’s engagement for reasons other than Permanent Disability or Cause
      during such Potential Change in Control, the Executive shall be entitled to
      receive the benefits that the Executive would have received under Section 3,
      such benefits to be calculated based upon the Executive’s compensation prior to
      the actual termination of engagement but paid within 20 business days of the
      date of such termination.





7. CHANGE
      IN
      CONTROL. For purposes of this Agreement, a “Change in Control” shall be deemed
      to have occurred on the earliest of the following dates:





(a) the
      date
      any Person is or becomes the Beneficial Owner, directly or indirectly, of
      securities of the Company representing 30% or more of the combined voting power
      of the Company’s then outstanding securities, excluding any Person who becomes
      such a Beneficial Owner in connection with a transaction described in clause
      (i)
      of paragraph (c) below; or





(b) the
      date
      on which the following individuals cease for any reason to constitute a majority
      of the number of directors then serving: individuals who, on the date hereof,
      constitute the Board and any new director (other than a director whose initial
      assumption of office is in connection with an actual or threatened election
      contest, including but not limited to a consent solicitation, relating to the
      election of directors of the Company) whose appointment or election by the
      Board
      or nomination for election by the Company’s stockholders was approved or
      recommended by a vote of at least two-thirds (2/3) of the directors then still
      in office who either were directors on the date hereof or whose appointment,
      election or nomination for election was previously so approved or recommended;
      or





(c) the
      date
      on which there is consummated a merger or consolidation of the Company or any
      direct or indirect subsidiary of the Company with any other corporation or
      other
      entity, other than (i) a merger or consolidation (A) immediately following
      which
      the individuals who comprise the Board immediately prior thereto constitute
      at
      least a majority of the board of directors of the Company, the entity surviving
      such merger or consolidation or, if the Company or the entity surviving such
      merger or consolidation is then a subsidiary, the ultimate parent thereof and
      (B) which results in the voting securities of the Company outstanding
      immediately prior to such merger or consolidation continuing to represent
      (either by remaining outstanding or by being converted into voting securities
      of
      the surviving entity or any parent thereof), in


A-6


combination
      with the ownership of any trustee or other fiduciary holding securities under
      an
      employee benefit plan of the Company or any subsidiary of the Company, at least
      50% of the combined voting power of the securities of the Company or such
      surviving entity or any parent thereof outstanding immediately after such merger
      or consolidation, or (ii) a merger or consolidation effected to implement a
      recapitalization of the Company (or similar transaction) in which no Person
      is
      or becomes the Beneficial Owner, directly or indirectly, of securities of the
      Company representing 30% or more of the combined voting power of the Company’s
      then outstanding securities; or





(d) the
      date
      on which the stockholders of the Company approve a plan of complete liquidation
      or dissolution of the Company or there is consummated an agreement for the
      sale
      or disposition by the Company of all or substantially all of the Company’s
      assets, other than a sale or disposition by the Company of all or substantially
      all of the Company’s assets to an entity, at least 50% of the combined voting
      power of the voting securities of which are owned by stockholders of the
      Company, in combination with the ownership of any trustee or other fiduciary
      holding securities under an employee benefit plan of the Company or any
      subsidiary of the Company, in substantially the same proportions as their
      ownership of the Company immediately prior to such sale.





Notwithstanding
      the foregoing, a “Change in Control” shall not be deemed to have occurred by
      virtue of the consummation of any transaction or series of integrated
      transactions immediately following which the record holders of the common stock
      of the Company immediately prior to such transaction or series of transactions
      continue to have substantially the same proportionate ownership in an entity
      which owns all or substantially all of the assets of the Company immediately
      following such transaction or series of transactions.





For
      purposes of this Agreement: “Affiliate” shall have the meaning set forth in Rule
      12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner” shall
      have the meaning set forth in Rule 13d-3 under the Exchange Act; “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time;
      and “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
      Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
      such
      term shall not include (i) the Company or any of its subsidiaries, (ii) a
      trustee or other fiduciary holding securities under an employee benefit plan
      of
      the Company or any of its Affiliates, (iii) an underwriter temporarily holding
      securities pursuant to an offering of such securities, or (iv) a corporation
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company.





8. POTENTIAL
      CHANGE IN CONTROL. A “Potential Change in Control” shall exist during any period
      in which the circumstances described in paragraphs (a), (b), (c) or (d), below,
      exist (provided, however, that a Potential Change in Control shall cease to
      exist not later than the occurrence of a Change in Control):





(a) The
      Company enters into an agreement, the consummation of which would result in
      the
      occurrence of a Change in Control, provided that a Potential Change in Control
      described


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in
      this
      paragraph (a) shall cease to exist upon the expiration or other termination
      of
      all such agreements;





(b)  Any
      Person (without regard to the exclusions set forth in subsections (i) through
      (iv) of such definition) publicly announces an intention to take or to consider
      taking actions the consummation of which would constitute a Change in Control;
      provided that a Potential Change in Control described in this paragraph (b)
      shall cease to exist upon the withdrawal of such intention, or upon a
      determination by the Board that there is no reasonable chance that such actions
      would be consummated;





(c) Any
      Person becomes the Beneficial Owner, directly or indirectly, of securities
      of
      the Company representing 20% or more of either the then outstanding shares
      of
      common stock of the Company or the combined voting power of the Company’s then
      outstanding securities;





(d) The
      Board
      adopts a resolution to the effect that, for purposes of this Agreement, a
      Potential Change in Control exists; provided that a Potential Change in Control
      described in this paragraph (d) shall cease to exist upon a determination by
      the
      Board that the reasons that gave rise to the resolution providing for the
      existence of a Potential Change in Control have expired or no longer exist.





9. NONALIENATION.
      The interests of the Executive under this Agreement are not subject in any
      manner to anticipation, alienation, sale, transfer, assignment, pledge,
      encumbrance, attachment, or garnishment by creditors of the Executive or the
      Executive’s beneficiary.





10. AMENDMENT.
      This Agreement may be amended or canceled only by mutual agreement of the
      parties in writing without the consent of any other person. So long as the
      Executive lives, no person, other than the parties hereto, shall have any rights
      under or interest in this Agreement or the subject matter hereof.





11. APPLICABLE
      LAW. The provisions of this Agreement shall be construed in accordance with
      the
      laws of the State of New York, without regard to the conflict of law provisions
      of any state.




12. SEVERABILITY.
      The invalidity or unenforceability of any provision of this Agreement will
      not
      affect the validity or enforceability of any other provision of this Agreement,
      and this Agreement will be construed as if such invalid or unenforceable
      provision were omitted (but only to the extent that such provision cannot be
      appropriately reformed or modified).





13. WAIVER
      OF
      BREACH. No waiver by any party hereto of a breach of any provision of this
      Agreement by any other party, or of compliance with any condition or provision
      of this Agreement to be performed by such other party, will operate or be
      construed as a waiver of any subsequent breach by such other party of any
      similar or dissimilar provisions and conditions at the same or any prior or
      subsequent time. The failure of any party hereto to take any action by reason
      of
      such breach will not deprive such party of the right to take action at any
      time
      while such breach continues.


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14. SUCCESSORS,
      ASSUMPTION OF CONTRACT. This Agreement shall be binding upon and inure to the
      benefit of the Company and any successor of the Company. The Company will
      require any successor (whether direct or indirect, by purchase, merger,
      consolidation or otherwise) to all or substantially all of the business and/or
      assets of the Company to expressly assume and agree to perform this Agreement
      in
      the same manner and to the same extent that the Company would be required to
      perform it if no succession had taken place. This Agreement is personal to
      the
      Executive and may not be assigned by the Executive without the written consent
      of the Company. However, to the extent that rights or benefits under this
      Agreement otherwise survive the Executive’s death, the Executive’s heirs and
      estate shall succeed to such rights and benefits pursuant to the Executive’s
      will or the laws of descent and distribution; provided that the Executive shall
      have the right at any time and from time to time, by notice delivered to the
      Company, to designate or to change the beneficiary or beneficiaries with respect
      to such benefits.





15. NOTICES.
      Notices and all other communications provided for in this Agreement shall be
      in
      writing and shall be delivered personally or sent by registered or certified
      mail, return receipt requested, postage prepaid (provided that international
      mail shall be sent via overnight or two-day delivery), or sent by facsimile
      or
      prepaid overnight courier to the parties at the addresses set forth below.
      Such
      notices, demands, claims and other communications shall be deemed
      given:





(a) in
      the
      case of delivery by overnight service with guaranteed next day delivery, the
      next day or the day designated for delivery;





(b) in
      the
      case of certified or registered U.S. mail, five days after deposit in the U.S.
      mail; or





(c) in
      the
      case of facsimile, the date upon which the transmitting party received
      confirmation of receipt by facsimile, telephone or otherwise;





provided,
      however, that in no event shall any such communications be deemed to be given
      later than the date they are actually received. Communications that are to
      be
      delivered by the U.S. mail or by overnight service or two-day delivery service
      are to be delivered to the addresses set forth below:





to
      the
      Company:





Capital
      Gold Corporation


76
      Beaver
      Street


26th
      Floor


New
      York,
      NY 10005





A-9




with
      a
      copy (which shall not constitute notice) to:





President


Capital
      Gold Corporation


76
      Beaver
      Street


26th
      Floor


New
      York,
      NY 10005





or
      to the
      Executive:





Christopher
      M. Chipman


4014
      Redwing Lane


Audubon,
      PA 19407





Each
      party, by written notice furnished to the other party, may modify the applicable
      delivery address, except that notice of change of address shall be effective
      only upon receipt.





16. LEGAL
      AND
      ENFORCEMENT COSTS. The provisions of this Section 16 shall apply if it becomes
      necessary or desirable for the Executive to retain legal counsel or incur other
      costs and expenses in connection with enforcing any and all rights under this
      Agreement or any other compensation plan maintained by the Company;





(a) The
      Executive shall be entitled to recover from the Company reasonable attorneys’
fees, costs and expenses incurred in connection with such enforcement or
      defense.





(b) Payments
      required under this Section 16 shall be made by the Company to the Executive
      (or
      directly to the Executive’s attorney) promptly following submission to the
      Company of appropriate documentation evidencing the incurrence of such
      attorneys’ fees, costs, and expenses.





(c) The
      Executive shall be entitled to select legal counsel; provided, however, that
      such right of selection shall not affect the requirement that any costs and
      expenses reimbursable under this Section 16 be reasonable.





(d) The
      Executive’s rights to payments under this Section 16 shall not be affected by
      the final outcome of any dispute with the Company.





17. SURVIVAL
      OF AGREEMENT. Except as otherwise expressly provided in this Agreement, the
      rights and obligations of the parties to this Agreement shall survive the
      termination of the Executive’s engagement with the Company.





18. ENTIRE
      AGREEMENT. Except as otherwise provided herein, this Agreement constitutes
      the
      entire agreement between the parties concerning the subject matter hereof and
      supersedes all prior or contemporaneous agreements, between the parties relating
      to the subject matter hereof; provided, however, that nothing in this Agreement
      shall be construed to limit any


A-10


policy
      or
      agreement that is otherwise applicable relating to confidentiality, rights
      to
      inventions, copyrightable material, business and/or technical information,
      trade
      secrets, solicitation of employees, interference with relationships with other
      businesses, competition, and other similar policies or agreement for the
      protection of the business and operations of the Company and the
      subsidiaries.





19. COUNTERPARTS.
      This Agreement may be executed in two or more counterparts, any one of which
      shall be deemed the original without reference to the others.





IN
      WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has
      caused these presents to be executed in its name and on its behalf, and its
      corporate seal to be hereunto affixed on this 1 st day of
      September, 2006, all as of the Effective Date.





s/
      Christopher M. Chipman


Christopher
      M. Chipman





CAPITAL
      GOLD CORPORATION





By: s/
      Gifford A. Dieterle


Gifford
      A. Dieterle, President








ATTEST:





s/
      Jeffrey W. Pritchard


Jeffrey
      W. Pritchard, Vice President




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